Air cargo industry coping with stricter security, rising fuel costs

2005 was not a good year for the air cargo industry, what with rising fuel cost and stricter security regulations; industry hopes 2006 will be better

2005 was not a good year for the air cargo industry. One reason for the gloom was the three-fold hike in fuel costs, bringing the fuel surcharge for one kilo shipped from 20 cents to 60 cents. Security requirements also played their part. The Known Shipper, used by the air cargo industry to screen shippers and cargo, has come under ever more intense scrutiny after 9/11. Some lawmakers have proposed changing the regulations to require the physical examination or X-raying of all cargo which is carried on passenger aircraft, though most agree such measures (the industry calls them “extreme measures”) would never pass. Proposed changes to the program were supposed to be announced last year, but the industry is still waiting. One reason for the problems with Known Shipper is that like other program (for example, TSA No-Fly terror watch list), the program is riddled with inaccuracies and glitches. “There’s no clue as to what’s going to happen, although I believe they’re probably going to improve the database,” says an industry insider. “It’s like any computer programming glitch, if you type in ‘St.’ instead of ‘Street,’ the system may not recognize the address for the shipper you’re looking up,” he explains.

Criticism of current security strictures notwithstanding, another insider says, “I think the current program needs to be taken more seriously by the forwarding community.” He says that his company recently brought in a consultant and during the review, the consultant found several minor items that would be considered non-compliant to the TSA. “For me, the thought of something passing through my company that could lead to an investigation was really alarming,” he says, “but I don’t know that every other forwarder would feel that same way. Quite honestly, it’s not a high-margin industry and people sometimes take shortcuts because they don’t want to upset the shipper. I think what we have now is sufficient, but the forwarders need to be more closely monitored by the TSA to make sure they’re complying with the program.”